China Business is Brisk on N. Korea's Trade Lifeline

by Naharnet Newsdesk15 December 2012, 11:12

On China's economic front line with North Korea, rocket launches are far from traders' minds and few worry about sanctions impeding the flow of cars -- or pianos.

China is by far North Korea's biggest trading partner and most of the business passes through its northeastern city of Dandong, where lorries piled high with tyres and sacks were being processed on Friday at a customs post.

Some travelers waiting to cross to the North through an immigration checkpoint were carrying wreaths, apparently to mark Monday's first anniversary of the death of leader Kim Jong-Il.

If the United States, South Korea, Japan and others want to tighten the economic screws on the North after what they see as a banned ballistic missile test ordered by Kim's son and heir Jong-Un, here would be a good place to start.

But Chinese traders do not expect Wednesday's launch to have a significant effect on commercial ties, which so far have survived previous efforts to sanction Pyongyang.

Some said life in the isolated state was getting better under Jong-Un.

Sun Xiaowei, who works for a company producing wiring in North Korea for export to China and on to South Korea, shrugged off any concerns. Business was "very good", he said.

China has long been the North's most important ally and has also become its biggest trading partner in recent years as business with South Korea and Japan has withered in the wake of Pyongyang's nuclear and missile development, and other tensions.

Much of the trade across the Yalu river border is not illegal under current United Nations sanctions, which mainly ban weapons-related items and luxury goods.

But China's commercial lifeline is seen as helping to thwart international efforts to pressure the isolated North Korean regime to change its ways.

Trade with China accounted for 89 percent of North Korea's total imports and exports last year, Seoul's Korea Trade-Investment Promotion Agency said in May, surging 62.4 percent year-on-year to $5.63 billion.

In Dandong, there are even signs of increasing wealth in parts of the North's society, with demand for a classic accoutrement of the middle class worldwide -- pianos.

"North Koreans want Japanese pianos because the quality is good," said an ethnic Korean Chinese woman who sells second-hand Yamaha and Kawai instruments to North Korean brokers for around $2,000-to-$3,000 apiece -- as many as 10 in a good month.

Means of exchange vary. The woman takes US dollars for the pianos, while a Chinese trader said he sells seven or eight cars a month for yuan, and a company employee said his firm mostly bartered trucks for North Korean goods such as coal.

Beijing is seen as opposing strong UN measures for fear of destabilizing a largely poverty-stricken, hungry and unpredictable nuclear-armed country on its border.

It has said any response to the widely criticized launch should avoid "escalation of the situation".

That stance would protect the interests of Chinese traders such as Li Hong, who has been dealing with the North for almost 20 years and whose company manufactures womenswear in Pyongyang for export to China.

"I think it is getting better and better," she said of the North.

Wang Yuangang started exporting vehicles and auto parts to North Korea in the late 1990s -- when "we couldn't even see neon lights in the streets" -- and now has a half-share in a joint venture automaker in Pyongyang.

He said he has seen positive changes in the business environment and people's livelihoods since Kim Jong-Il's death. "Many people can afford eating out in restaurants and the decor of newly opened restaurants is quite luxurious."

But the regime in Pyongyang is renowned for its secretiveness and North Koreans involved in cross-border commerce were similarly tight-lipped.

In one Dandong office a bespectacled North Korean with a hard stare was instantly suspicious of questions from AFP.